GENERATION FRESH

Roseanne Harper

It might seem difficult to freshen up fresh foods -- but that's what retailers are doing with renovated stores, interactive displays and better consumer intercepts that serve as a showcase for new products.

The changes acknowledge the power perishables have in influencing consumer behavior. Here, retailers are responding to consumer demand, but they're also increasingly using produce, meat, dairy and bakery to compensate for losses on the dry grocery side, where the emphasis is on price, retailers and industry observers told SN.

"We're looking to gain customers' confidence right away when they enter. We want to show them quickly that we have the best of the best in fresh products," one operator said.

The advent of the cutthroat Wal-Mart Stores pricing model has forced supermarkets to de-emphasize Center Store prices and shift their energies to the fresh-foods areas, where margins are better and merchandising strategies more numerous.

As a result, supermarket executives realized they can build "fresh-centric" stores that can be smaller, more flexible and less expensive to operate -- but have just as much impact on the consumer.

Larry's Markets, Bellevue, Wash., is a case in point. The six-unit, upscale regional is getting ready to open smaller-format stores measuring about 28,000 square feet -- less than half the size of its existing ones. Here, the emphasis is on the fresh departments. Nonfoods will be pared down. Produce will be moved to the front door, and the prepared-foods department will still be right up front as it is in its stores now.

"Produce has always been our emphasis, but we'll be really showcasing it. Not that we'll minimize center store, but we won't carry the breadth of [stockkeeping units] there that we do in our other stores," said Russ Ruby, Larry's vice president, sales and marketing. "Proportionately, there'll be slightly more space for perishables. These stores are designed for high-frequency shopping."

Meanwhile, Schnuck Markets, St. Louis, has increased total perishables selling space by an estimated 15% to 20% in a new prototype store it opened in April. Brigido's IGA Marketplace, a three-unit, North Scituate, R.I.-based independent that's soon to change its name to Brigido's Fresh Market, has begun a redo that'll turn one of its dated stores on its head. More space will be devoted to perishables by consolidating dry grocery -- with fewer SKUs on higher gondolas -- against the wall on the opposite side of the store from perishables. The whole fresh presentation will be first in line at the remodel. Currently, those departments are all in the back.

Once the renovation is complete, customers upon entering the store will be flanked on one side by an entire aisle of produce, and prepared foods, fresh meat and a newly installed service seafood counter on the other side.

Another regional, Food Circus, Middletown, N.J., with 10 Foodtown and Super Foodtown banner stores, is bringing its kitchens to the front, opening them up. It has put in a permanent, fully equipped demo station at the head of the fresh aisle. A coffee bar, complete with baristas offering cappuccinos and flavored coffees and teas, has been added, too.

At Larry's, the first small-format store is set to open in the fall, and will be followed by more in the general vicinity, Ruby told SN. In the meantime, big changes have been made at existing stores that heighten the visibility of fresh departments.

For one thing, themed events, which used to be a once-in-a-while thing, are regularly scheduled now. New ones that underscore existing strengths like Larry's stand-out cheese departments have been pulled off with unprecedented flair -- and with terrific sales results, Ruby said.

"In February, we had a 'Homage to Fromage' event that went on for three weeks. We had huge demo stations at six places in each store. There were two 30-inch round tables and a six-foot-long table at each station. There were [cheese-themed] graphics hanging overhead throughout the store."

Each of the six stations, placed in different departments of the store, was staffed by several associates.

"We tried to use just our own employees, but it was a combination. Just because we needed so many people, we did also use some outside people. We wanted to get customers tasting as many of our 400 varieties as we could," Ruby said, adding that cheese sales tripled during the period. "We showed them how to use different cheeses and what wines would go with them. A few times, we had restaurant chefs showing how to cook with Parmigiana reggiano and some other cheeses."

Permanent visuals over the food-to-go area of Larry's cafes, too, have been punched up with color and new designs. At the same time, the company has, since the beginning of this year, put new effort into controlling and maintaining consistency of its high-margin, signature products, Ruby said.

"We've taken a rifle approach with key products, upscaling them, and then paying a lot of attention to the program," he said. For example, the crust of the chain's fresh-made pizza has been reformulated. "We're putting the discipline in to make sure the full variety is always available and that there's a full stock. We've quadrupled the display of the [chilled] pizzas to more than 8 feet and put it right where you walk into food service. Sales have just taken off."

Another category getting new attention is mush rooms. Portobello displays have been tripled in size, and the whole category of mushrooms is highlighted with chalkboard signs and full-page flier ads.

Then, in a new twist beginning in January, Larry's began direct-mailing branded postcards that give customers hard-to-ignore coupons.

"In January, the deal was five pounds of navel oranges free with the coupon. Oh, yes, we increased our traffic. These things work," Ruby stated.

Schnucks employed a Toronto, Canada, design firm, Perennial Inc., to help emphasize to customers that Schnucks has had its roots all along in perishables. The Schnuck family started out 60 years ago with a fresh meat business that evolved over the years into a full-line grocery store. In the new prototype store, huge, blown-up photos of butchers, called "Meat Masters," at work in Schnucks' early stores hang from the ceiling. Cubed light boxes sporting big, colorful illustrations of steaks, fish and artisan breads hang over the respective fresh departments.

In the new Schnucks stores, too, an expanded floral department is "front and center, creating the centerpiece of the store," said Lori Willis, communications director at the 102-unit chain.

"Also a major change is that the deli and Chef's Express have been moved up to the front entrance, adjacent to produce, to make it easy for customers to get to the prepared foods and out again quickly. We take great pride in our fresh foods, and they've definitely been given extra emphasis in the new stores. The stores have been lightened up, too. We've always had that open air market feel, but it's maxxed here."

The same goes for Brigido's at the remodel it expects to be completed by August. Mark Brigido, one of the owners, told SN the aim is to create a farmers' market aura that showcases everything the company does in fresh foods -- the services as well as the products. On the redo, he's working with Making A Statement, a Rochester, N.Y.-based consulting and design firm that works with supermarkets.

One of the features at the newly done Brigido's Fresh Market will be a permanent demo station in the middle of the aisle between produce and meat.

"It'll be an island workplace where we'll always have some kind of theater going on," Brigido said. "We'd like to have demos, done by our own associates, going five days a week. We'll concentrate on recipes, showing customers how to use fresh ingredients to create good meals."

At a newly renovated Super Foodtown in Ocean, N.J., director of fresh foods Elton Reid pointed to a fully equipped demo station that heads up the fresh foods aisle at the recently remodeled store. It's an important addition that will be put in more stores, he said. The day SN visited, an associate was offering tastes of store-made tortilla chicken soup [see "Think Big," SN, April 4, 2005]. That store also boasts a huge repertoire of fresh, prepared foods attractively merchandised in a chef's case immediately visible upon entering the store.

Reid is not content to stop at this point. He's currently nourishing a catering program, which he expects to spread the fresh message further into the community.

That's something one industry consultant told SN he's seeing more of these days.

"More retailers are taking a cue from places like EatZi's and Andronico's and Zingerman's," said Anthony Tedeso, an Atlanta-based consultant. "They're doing more of that cash-and-carry catering that gets the customer into the store and shows them all the fresh possibilities. It's an excellent way to get the message out that they have a great variety of ready-to-eat or almost-ready-to-eat fresh food. The everyday kind of food. I see a resurgence of that going on, emphasizing that kind of service."

Another industry expert, Brian Salus, president, Salus & Associates, Midlothian, Va., said he wonders why more supermarkets aren't jumping on the opportunity to bolster takeout business.

"Supermarkets need to continue to look for new products and services and improve those they already have to ensure theirs are best in class, better than what's offered by the large chains, club stores and restaurants," Salus said. "I find it interesting that supermarkets will deliver groceries or carry them out to your car but not take your ready-to-eat dinner out to your car. This type of service is needed to help supermarkets gain a competitive edge."

Take-out business is flourishing at restaurant chains that are relatively new to the game. For example, Outback Steakhouse reports 10% of its sales are coming through its takeaway door, Salus added.